If you’re planning to sell your home, you may have asked yourself, “What taxes or fees do I need to settle if I sell my house in Ireland?” Whether you have to pay tax on the sale of your home depends on a number of factors. The first thing to remember is that if you’re disposing of your own home, you won’t automatically be liable for capital gains tax. In fact, under certain conditions an exemption can apply which means that no capital gains tax is payable at all.
The main factors are the length of time that you owned the house and whether there were any improvements made to it during those years. For example, if you purchased a house in 1999 and sold it in 2019, then unless any major works were carried out during this period (such as a new kitchen), most likely no CGT will be due as long as the property was used solely as your principal private residence throughout this time period and did not change hands more than once before disposal took place
Is It True That I’m Not Liable for CGT If I Sell My House?
The first thing to remember is that if you’re disposing of your own home, you won’t automatically be liable for capital gains tax. There are a number of factors that determine whether or not you will have to pay tax on the sale of your house:
The nature and purpose of the property being sold? If it’s a holiday home or investment property, then this could exempt you from paying capital gains tax.
How long was it owned for? You’ll only generally have to pay capital gains tax if the property has been held for more than three years in total during its lifetime (and two were within five years of its sale). If an individual buys a house with an intent to sell it again quickly after one year, they’re unlikely to incur any liability as long as they don’t rent it out during this period.
Factors That Determine If You Need to Pay Capital Gains Tax When You Sell Your House
The Revenue Commissioners will consider the following factors when deciding whether or not you might have to pay capital gains tax on the sale of your house.
- If you’ve owned the property for less than 3 years, you may be liable.
- If there have been substantial works carried out on the property since you bought it, they may be liable.
- If you inherited this house recently, you may be liable.
- If you had lived in your house for less than three years when it was sold, then technically you may be liable for capital gains tax on the sale.
- If you have owned your house for less than three years, then technically you may be liable for capital gains tax on the sale. This is true even if you have lived in your house for all that time. Capital gains tax is charged at a rate of 33%.
The amount of capital gains tax payable depends on how much time has elapsed between when you purchased the property and when it was sold:
- If this period was one year or less, there will be no capital gains tax to pay.
- If this period was between one and two years, 20% of any gain over €1 million will be subject to capital gains tax (i.e., 80% of the gain would be exempt).
- If this period was between two and three years, 40% of any gain over €1 million will be subject to capital gains tax (i.e., 60% of the gain would be exempt).
If you have owned your property for more than three years, then the capital gains tax rules do not apply to you. However, it is worth noting that this exemption only applies if you sell your own home and not if you inherit one or buy one as an investment.
If you’re selling your home, it’s best to get some professional legal advice. A solicitor will be able to help you work out the best way to sell the property, whether that’s through auction or private sale. They also have experience with dealing with tax issues and can advise on how much of a potential profit should be declared for tax purposes if you decide to do so.
Are you planning to sell your house in Ireland? Our team of experts can give you more information on taxes related to selling a house? Contact us here or call us now at 014959020!